by kevinyeo | Nov 28, 2018 | Questions and Answers
Question: How do we do deductibles for income tax in Thailand?
Answer:
In Thailand, rental income is treated as personal income and will be subject to tax.
It is important to note that in Thailand, there are legitimate items that can be treated as deductibles so that it will lower your chargeable personal income.
Some examples of such deductibles would be agent’s commission and cost of furnishing the property. These can be offset against the total rent collected by you.
For more clarity on what are the eligible items for deductibles or how to go about doing it, it is a good idea to engage a competent local agent to assist in this matter.
Over at BKK Gonyu, we have a team specializing in property management. Please do feel free to check with us if your Bangkok property requires property management services.
Got a question for us? Reach us at [email protected] or [email protected]
by kevinyeo | Nov 23, 2018 | News
BoT lowers 2nd housing loan bar to 10-20%, LTV unchanged for first-timers buying under B10m.
The Bank of Thailand will impose a more stringent required minimum down payment for third and subsequent mortgages of 30% of the home price, but it will ease the minimum requirement for a second housing loan to 10-20%, depending on how long a borrower has made payments on the first one.
The effective date has been pushed back four months to next April 1 after lobbying by property developers and lenders.
The central bank will require those who purchase a home at a price below 10 million baht and seek a second home loan to make at least a 10% down payment in the event that they have made payments on the first mortgage for three years or longer, said Jaturong Jantarangs, assistant governor in charge of the supervision group.
The minimum down payment requirement will be raised to 20% if borrowers have serviced the first mortgage for less than three years.
For those who seek a second mortgage to fund the purchase of a home priced at 10 million baht or higher, a minimum 20% down payment is required.
Those who apply for third and subsequent mortgages will be subject to a minimum 30% down payment, regardless of home price.
The loan-to-value (LTV) ratio of 90-100% remains unchanged for those who apply for a first mortgage to buy a home priced below 10 million baht, but the ratio will be lowered to 80% in cases where a borrower buys a residence valued at 10 million baht or higher.
Typically, a loan with a lower LTV ratio carries less risk for both lender and borrower, as less capital is being borrowed.
“The revised-mortgage loan regulation will impact homebuyers who have multiple mortgages at the same time, and those who purchase residential units priced from 10 million baht,” Mr. Jaturong said.
The tighter rules are to comply with the central bank’s macroprudential policy to minimize risk in the property and mortgage lending industries. Thailand’s 1997 financial malaise originated in the real estate sector.
Mr. Jaturong has said repeatedly that there is no sign of a property bubble right now.
The central bank last month proposed requiring borrowers to make a down payment of at least 20% of homes priced at 10 million baht or higher, as well as for second and subsequent mortgages, in an effort to curb mortgage and property risks and improve housing loan quality.
Under the previous proposal, lenders would also have been required to limit mortgages together with top-up mortgages such as personal loans and loans for mortgage-reducing term assurances (MRTA) at 80% of home value for second mortgages and homes priced at least 10 million baht, and at 100% for first homes valued below 10 million.
Mr. Jaturong said loans for MRTA, small and medium-sized enterprises and fire insurance, under the new rules, will not be counted into a single amount with a mortgage, but other types of top-up mortgages must be bundled into the mortgage.
The new regulation will strengthen mortgage loans approved by financial institutions, while the unchanged down-payment requirement for the first mortgage to buy homes priced at less than 10 million baht will allow those who have a real demand to access housing loans at a reasonable interest rate.
Mr. Jaturong said the new requirement will not be applied to those with signed land sale contracts or those who made down payments before Oct 15 this year, to the refinancing of sole mortgages, or to housing loans for building homes on owned land that is free of debt.
source: https://property.bangkokpost.com/news/1573326/30-down-payment-for-3rd-mortgage
by kevinyeo | Nov 22, 2018 | News
The residential market in 2019 will slow down, with new condominiums in middle- to lower-end segments expected to delay launches if the Bank of Thailand’s new requirements on loan-to-value (LTV) limits, scheduled to be announced tomorrow, are unchanged, says an industry chief.
Prasert Taedullayasatit, formerly president of the Thai Condominium Association, said new residential supply next year will be flat at 430-440 billion baht, the same amount as this year if the new LTV requirements do not change.
“Developers planning to launch new condos in the middle- to the lower-end segment will likely delay the opening for 3-5 months to give customers time to prepare for a higher down payment of 20%, up from 10-15%,” he said.
The new requirements include LTV limits capped at 80% of home value for second or higher contracts, or for units priced 10 million baht or above. They will take effect on Jan 1, 2019.
Many developers commented that the new requirements should only apply to start from third contracts as many buyers want to buy a unit in the inner city as a second home for their children or a place to stay near work during the week.
The effective date should be extended to July 2019 so buyers who booked a unit prior to the central bank’s announcement last month on the new LTV have sufficient time to prepare for the higher payment during the transfer period, said Mr Prasert, also president of premium business at Pruksa Real Estate, a subsidiary of SET-listed Pruksa Holding Plc (PSH).
The central bank is reviewing developers’ comments and suggestions before finalizing and making an official announcement tomorrow.
“The new LTV limits will have no impact on the upscale condo segment,” he said.
“Condo buyers in the upper-end market for units priced 10 million baht or more are able to pay a higher down payment of up to 20% of the unit price.”
Half of the buyers in this segment use cash to buy said Mr. Prasert.
During the first 10 months this year, Pruksa’s premium business launched a four new condo projects worth a combined 7.3 billion baht and recorded 7 billion baht in presales, higher than its target of 6.8 billion for the whole year.
He said the upper-end condo market next year will have higher competition as demand in this segment has been absorbed, though a chunk of supply launched this year and last still remain.
“Upper-end condo developers should seek niche demand and position products accordingly,” said Mr. Prasert.
“Large units for a big or extended family are still in demand.”
This month the company will launch a new condo project worth 1.75 billion baht on Thong Lor Soi 25.
Pruksa also plans to launch a high-rise condo project by the Chao Phraya River on Charoen Nakhon Road in the fourth quarter next year to capitalize from the positive impact of the opening of Iconsiam.
PSH shares closed yesterday on the Stock Exchange of Thailand at 20.20 baht, a decrease of 10 satangs, in trade worth 6.49 million baht.
source: https://property.bangkokpost.com/news/1571930/condominium-market-picked-to-slow-in-2019
by kevinyeo | Nov 21, 2018 | Questions and Answers
Question: Can I Secure A Loan Today When Buying Uncompleted Properties?
Answer:
For foreigners, we are often offered a deferred payment scheme by developers when purchasing an uncompleted condominium. Deferred payment scheme refers to the buyer first being required to make a downpayment (often 20% to 30%) and the remaining amount (70% to 80%) to be payable nearer to completion of the condominium.
In Bangkok, subject to credit assessment, foreigners are able to get a mortgage loan from some of the financial institutions in Bangkok.
Read also: Can A Foreigner Take A Property Loan In Thailand?
We are often asked by buyers if they can first confirm their eligibility to take up property loan before committing to the purchase.
The straight answer is no. Let me explain why.
The loan can only be applied at the point when you are required to pay the remaining amount of the property value. Timeline wise, for a brand new condo, this will only happen 2 to 3 years down the road.
In other words, banks will only entertain your application for the mortgage loan nearer to completion of the property or when this final payment is due.
You are required to pay the upfront downpayment via cash only.
As for the applicable interest rates and terms, it will be as per the bank’s conditions 2 to 3 years down the road. Whatever are the terms of mortgage and interest rate today will not apply to you. Not unless you are purchasing a completed condominium today.
Got a question for us? Reach us at [email protected] or [email protected]
by kevinyeo | Nov 21, 2018 | News
The condo market in capital’s east end has the potential to evolve into another prime location in the upper tier.
The residential condominium market in Bang Na has the potential to grow and expand at a healthy pace, according to Phanom Kanjanathiemthao, managing director of the real estate services firm Knight Frank Thailand.
The location on the east side of Bangkok has evolved with a full range of facilities to meet the needs of working professionals not only in Bang Na but also Bang Phli, Bang Bo and beyond, including Chon Buri. Many public- and private-sector developments are taking place that will increase the potential and value of assets in the future, Mr. Phanom said. They include:
– Bangkok Mall, a large, regional shopping center occupying 100 rai, with an investment value of 20 billion baht. The 650,000 square meters of space will comprise a shopping center, cinema, product exhibition center, amusement park, water park, condominium, residential units for rent or as serviced apartments, and office space for rent. Once fully open in five years, Bangkok Mall will be the largest shopping center in Thailand and Southeast Asia. Poised to become a major regional magnet, the complex will also benefit from the development nearby of the new Eastern Bus Terminal, which will move from its current site at Ekamai on Sukhumvit Road.
– Mega City Bangna is raising its profile with a Phase 2 mixed-use development boasting a total investment of 67 billion baht. Adding to Mega Bangna, the second phase consists of shopping and office space, two hotels and residential condominiums with green spaces and public parks on a total area of 400 rai.
– The Forestias is a 90-billion-baht mixed-use lifestyle property project on more than 300 rai. The construction site spans some 600,000 sqm and includes a commercial area with a community mall, six-star medical complex for rent, six-star boutique hotel, four-star hotel, learning center, kindergarten, and an innovation building. Construction began this year, with completion scheduled for 2022.
– The Bang Na-Suvarnabhumi train line is part of the MRT Master Plan Phase 2, which is currently under study, with private investment partners being sought. The light rail train will connect to the Green Line (Sukhumvit Line) at Bang Na station. Running along Bang Na-Trat Road for 18.3km with 14 stations, it is expected to accommodate 40,000 passengers per day from Bang Na to South Suvarnabhumi station. Sri Iam station will serve as an interchange connected to the Yellow Line (Srinakarin Road). Additionally, Thana City station will house a parking and maintenance facility on 29 rai of land.
– The area between Bang Na-Trat Km 19 and 23 is expected to become an important logistics hub, housing the distribution centres of many large companies. The total warehouse area is about 1.2 million square metres. It also contains a large number of industrial plants, making it a major employment source in Samut Prakan province. The location offers the potential to be linked to the production centres of the Eastern Seaboard, which is currently being transformed into the broader Eastern Economic Corridor (EEC). In addition, plans for a site at Km 32.5 call for a full-scale industrial estate on an area of 4,300 rai.
– Bang Na encompasses a large residential area. Many detached housing and townhouse developments already command relatively high prices, among them Lakeside Villa, Krisada Nakorn, Nuntawan, Baan Issara, Blue Lagoon and Baan Klang Muang. Bang Na-Trat itself links Sukhumvit and Srinakarin roads, so the city is easily accessible via the Chalerm Mahanakorn Special Expressway, or via the Green Line and the Yellow Line under construction, which will further enhance travel convenience.
– Bang Na is also home to many international schools, such as Bangkok Patana School, Thai-Singapore International School, Berkeley International School, St Andrews International School, Concordia International School, Didyasarin International Preparatory School, Thai-Chinese International School, and St Joseph Bang Na School, among others.
A total of 7,836 residential units have been developed in Bang Na since 2009, with a 94% sales rate and a focus largely on condos in the Grade C segment. The average selling price for new Grade B high-rise condominiums launched in 2017-18 in Bang Na-Sukhumvit is approximately 120,000 baht per sqm.
source: https://property.bangkokpost.com/news/1571350/bang-na-area-showing-growth-promise
